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When It Comes To eBay, Don't Follow The Herd

Q: I want to start an online business. Since I don't know anything about ecommerce and building websites and such, I'm thinking about starting out selling products on eBay, then pay someone to build a website for me once the money starts coming in. The big question is: what is the hot product to sell on eBay to make money fast?

-- Bob D.

A: While it's true that selling products on eBay can be a quick, low cost way to launch an online business, following the herd by selling the "hot product" of the moment, is not a great idea. To the contrary, chances are you will be stomped in the ground by the herd and left lying in the dust with your unsold inventory in hand.

We talked about starting a profitable eBay business in a previous column and the advice I dispensed then still applies today.

The most successful eBay sellers are those who understand that success on eBay relies on many of the same factors as success in a brick and mortar business.

Smart sellers research the marketplace and the competition to determine the salability and profitability of the product.
Smart sellers test the market with one or two before committing to a product line and tying up their cash reserves in inventory that may never sell.
Smart sellers adjust their product offerings until they find a product or product line that sells consistently.
The last point is perhaps the most important. Long term eBay success does not come from "one off" sales. The key to real eBay success is to find a product that sells well and sell that product over and over and over again.

I asked Timothy Mina, author of the new book, The Online Auction Expert's Bible To Selling on eBay, his thoughts on launching a successful eBay business.

Why is eBay so attractive to entrepreneurs?

"With an eBay business, you set your own hours and set your own goals," Mina said. "You can work as much or as little as you want and whenever you want. Many sellers supplement their income by selling on eBay and many others have turned it into a full time business."

Mina cites the following reasons for eBay's growing popularity among entrepreneurs who want to start an online business:

You can start up quickly and don't need special skills.
There is very little risk and investment required to get started.
The marketplace is huge. There are millions of potential customers waiting to buy what you're selling, 24 hours a day, with the click of a button.
No stress, no boss. Yes, there is work involved, but the work can be done at your own pace. You are your own boss and you set your own schedule.
Most importantly, you can follow your passion and do something you love. If you sell something you enjoy selling, online auctions aren't just profitable, they're fun and exciting, too.
Why It's Critical To Find Your Niche

Mina recommends creating your eBay business with niche items. According to Mina, the benefits of targeting a specific niche market include:

If you are going to rely on eBay as your primary source of income, it is essential that you find your niche. If the goal of your eBay business is to earn enough money in your spare time to make your car payment every month, it is less important, but still highly recommended.
If you find a profitable niche, you will become a certified guru of the items you sell you will ideally be the only one on eBay offering the products.
Your expertise will make it ten times as easy to spot bargains when you're shopping for products to resell. Bargains might be all around you, but if you don't know anything about what you're selling, you won't know how to spot bargains that are right in front of you.
You will find different ways to add personal value to your products. These low cost add-ons or unique twists to your products will drastically increase your sales and profits by making your items unique and desirable.
You will have little or no competition from other sellers, so you can corner your niche market.
By dealing with the same type of customer over a long period of time you will get to intimately understand the mindset of your target customer and what your customer wants. This will help you sell your products better and allow you to market your products in ways others haven't thought of.
You will be knowledgeable and enthusiastic about what you sell, and you will be attentive to your customer's desires. This results in satisfied customers, name recognition, and a lot of repeat business.
You're going to find something you're passionate about and specialize in it. If you love what you're doing, you have a much greater chance of sticking to it and loving it.

How do you find your niche?

So how do you find your niche? Mina recommends doing an inventory of your hobbies and interests to help you identify a niche you would enjoy working in.

Ask yourself:

What are you passionate about?
What do you collect?
What do you like to read about?
What do you do in your spare time?
So you have a favorite pastime?
What was your major in college?
What jobs have you had?
Are there any other fields in which you have a great amount of knowledge?
What clubs do you belong to?
Mina also recommends that you spend time on eBay studying the category listings. This may give you additional ideas for hobbies you can turn into an eBay business. Once you have defined your hobbies or interests, brainstorm how you can turn them into a business.

How can you turn your expertise into a product?
How can you add value to current products related to your interest?
What product can you sell that may be one of a kind and have little or no competition?
Can you think of novel ideas that people who share your passion would love?
Is there anything related to your hobby that you can create yourself? An ebook or a how to, perhaps?


About the Author: Tim Knox
Entrepreneur, Author, Speaker
Tim Knox is a nationally-known small business expert who writes and speaks
frequently on the topic.
For more information or to contact Tim please visit one of his sites below.
http://www.dropshipwholesale.net
http://www.smallbusinessqa.com
http://www.timknox.com




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